Funeral trust dollar limitation repealed.

• Author: Nevius, Alistair M.
• Position: Legislation

On August 29, 2008, President Bush signed into law the Hubbard Act, P.L. 110-317, which repealed the dollar limitation on funeral trusts.

Under Sec. 685(c) (prior to repeal), aggregate contributions to a qualified funeral trust could not exceed $7,000. That limitation has been eliminated, effective August 29. The Congressional Budget Office estimates that this change will raise a small amount of revenue ($6 million from 2009 through 2018) because income earned by a qualified funeral trust is taxed at estate and trust tax rates.

Before the limitation was repealed, a qualified funeral trust that had aggregate contributions in excess of $7,000 ceased to be a qualified...